Transcript

1.
VALUE.GROWTH.VISION Growing and advancing one of the world’s largest undeveloped silver and indium resources.Corporate Presentation TSX: SAC, US OTC: SOHAFOctober 2011 www.soamsilver.com

2.
Cautionary NotesForward-looking statementsCertain statements contained herein constitute “forward-looking statements.” Forward-looking statements look into the future andprovide an opinion as to the effect of certain events and trends on the business. Forward-looking statements may include wordssuch as “plans,” “intends,” anticipates,” “should,” “estimates,” “expects,” “believes,” “indicates,” “targeting,” “suggests,” “potential,”and similar expressions. These forward-looking statements are based on current expectations and entail various risks anduncertainties. Actual results may materially differ from expectations, if known and unknown risks or uncertainties affect ourbusiness, or if our estimates or assumptions prove inaccurate. Investors are advised to review the Company’s Annual InformationForm filed at www.sedar.com for a detailed discussion of investment risks. The Company assumes no obligation to update orrevise any forward-looking statement, whether as a result of new information, future events or any other reason.Cautionary note regarding reserve and resource estimatesThe material in this presentation has been prepared in accordance with the requirements of the securities laws in effect inCanada, which differ from the requirements of U.S. securities laws. Unless otherwise indicated, all resource and reserveestimates included in this presentation have been prepared in accordance with National Instrument 43-101 Standards ofDisclosure for Mineral Projects (―NI 43-101‖) and the Canadian Institute of Mining and Metallurgy Classification System. NI 43-101is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuermakes of scientific and technical information concerning mineral projects. Canadian standards, including NI 43-101, differsignificantly from the requirements of the United States Securities and Exchange Commission (―SEC‖), and resource and reserveinformation contained herein may not be comparable to similar information disclosed by U.S. companies. In particular, and withoutlimiting the generality of the foregoing, the term ―resource‖ does not equate to the term ―reserves‖. Investors should alsounderstand that ―inferred mineral resources‖ have a great amount of uncertainty as to their existence and great uncertainty as totheir economic and legal feasibility. It cannot be assumed that all or any part of an ―inferred mineral resource‖ will ever beupgraded to a higher category. The estimation of quantities of resources and reserves is complex, based on significant subjectiveassumptions and forward-looking information, including assumptions that arise from the evaluation of geological, geophysical,engineering and economic data for a given ore body. This data could change over time as a result of numerous factors, includingnew information gained from development activities, evolving production history and a reassessment of the viability of productionunder different economic conditions.Changes in data and/or assumptions could cause reserve estimates to substantially change from period to period. No assurancecan be given that the indicated level of mineral will be produced. Actual production could differ from expected production and anadverse change in mineral prices could make a reserve uneconomic to mine. Variations could also occur in actual ore grades andrecovery rates from estimates. 2

3.
Investment HighlightsSouth American Silver Corp.• Experienced management team with track record of successful project development and value creation• Two large-scale deposits in South America • Malku Khota: one of the world‘s largest silver-indium-gallium resources • Escalones: high potential copper-silver-gold deposit• Updated 2011 PEA study doubles estimated production to 13.2 M oz silver, 80 tonnes of indium and 15 tonnes of gallium per year, for first 5 yrs• Measured and Indicated resources expanded 60% to 230 M oz silver• Well defined business plan to drive shareholder value• Leveraged to silver nearly 4 oz of silver per share (6 oz silver equivalent)• Attractive investment value relative to peers at low value per oz• Exposure to the high-tech indium and gallium market• Potential value from new copper-silver-gold resource• Strong focus on community relations• Well financed into feasibility 3

8.
Enterprise Value per Silver Resource Oz Producer By project development stage Average ~$20/oz $20.00 $18.00 $16.00 EV of >$0.80 base on 230.3 million M&I oz Ag $14.00 Advanced Development $12.00 Stage Average ~$6/oz $10.00 Development Stage $8.00 Average ~$3/oz $6.00 $4.00 $2.00 $0.00Source: Canaccord & Intierra as of June 9, 2011,Note: All companies have projects in South and/or North America 8

9.
Development Stage Value Curve Potential value growth with project advancement Average Enterprise Value per Oz of Silver by Stage Production Take-Over offers or Partnerships Construct $20/oz Increasing Market Value Increased value common at this through resource stage expansion Permits FS PFS $6/oz Resource PEA Definition $3/oz Early Stage Advanced Production Discovery Exploration & Development Development Stage (Reserves) Increasing value with project advancementSource: Recent average enterprise value per ounce of silver atvarious development stages for North and South American based 9projects. Canaccord, Wellington West and Company reports.

11.
Positive Silver Fundamentals A paradigm shift for silver? • Major shift in supply/demand dynamic over past several years • Silver still well below inflation adjusted highs of $140/oz ($50 in 1980) • Silver is a ―hybrid‖ precious and industrial metal due to its scarcity and unique properties including superior electrical and thermal conductivity, malleability, reflectance, and catalytic/biologic reactivity • Price increases driven by 40% increase in investment demand and 21% increase in industrial demand for a total increase of 17% in 2010 • Total annual mine production growth only 2.5% last year with reduced contribution of by-product silver from copper and gold production • Projected new mine supply anticipated to be consumed by new industrial demand through at least 2015 • Chinese imports up 4x since 2009 with change from net sellers of more than 100 M oz of silver in 2005 to net buyers of more than 120 M oz in 2010 • Few major new deposit discoveries and growing time lag from time of discovery to metal productionSource: 1) GFMS World Silver Survey 20112) BMO Capital Markets Global Mining Research April 2011 11

18.
Indium & Gallium Fundamentals Compelling supply/demand dynamics Indium and Gallium Supply/Demand dynamics • Indium and gallium highlighted in UN and US DOE studies as a critical technology metals in potential shortage, along with several key rare earth metals, due to rapidly increasing growth, low recycling rates and low primary production • China is largest producer and consumer of indium and has imposed export quotas and tariffs like on other key high-technology specialty metals • Indium market estimated to see 15-20% annual growth with most indium produced as by product of zinc refining growing at 1-3% annually • Current indium and gallium price ~$900-1000/kg up from global economic lows during 2008-2009 of $400-500/kg • Gallium market estimated to be a conservative 15% annual growth rate which could increase significantly with more rapid growth in LED lighting and photovoltaics Malku Khota annual indium and gallium production • Malku Khota projected to be one of the world‘s largest indium & gallium producers (80 tonnes and 15 tonnes per year) • Potential to represent 10% or more of global mine supply of indium and over 5% of global supply for gallium • Opportunities for project financing from off-take agreements for indium & galliumSources: (1) US Dept. of Energy Critical Materials Strategy, Dec.2010. (2)United Nations Environment Programme (UNEP) Special 18Report on Strategic Metals ,May 2011 .

23.
Silver Mines in Bolivia One of the world’s premier silver mining districts • Historical district production of billions of ounces of silver • Highly prospective & under-explored • Increase from 9th largest global silver producer to 5th largest with completion of three major silver mines in past four years:  Pan American Silver – San Vicente  Coeur D‘Alene - San Bartolome  Sumitomo - San CristobalTSX:SAC 23US OTC:SOHAF

24.
Opportunity in Bolivia An emerging resource based economy • Bolivian government encouraging private investment • Member of Mercosur Regional trade organization with Brazil as largest trading partner • Government bond ratings upgraded by Moody‘s & Fitch • Mining second largest economic sector • One of the world‘s premier silver districts with billions of ounces of silver production • Planned $32 billion 5-7 year infrastructure build-out by Bolivian government for new rail and road corridors and hydropower generation • Three Major silver mines built within last four years by Pan American Silver, Coeur D‘Alene, and Sumitomo • Substantial resource industry investments in Bolivia  Jindal Steel of India investing US$2.1 billion in giant El Mutun iron ore deposit  Petrobras of Brazil—Latin America‘s largest publicly traded oil company – investing US$1 billion of new capital into the Bolivian gas fields  Repsol of Spain investing $1.6 billion to increase gas production in Bolivia  Petrobras and Repsol have announced new exploration initiatives in Bolivia in early 2011  Recently announced investments by Chinese and South Korean companies to develop lithium resourcesTSX:SAC 24US OTC:SOHAF

26.
Malku Khota Project Low projected capital and operating costs with established infrastructure • 50 square km, 100% owned, road accessible project • Low capital and operating costs on a per ounce basis • Potential to be one of the top primary silver and indium producing mines at 13.2 Moz silver per year and 80 tonnes of indium1 • Project base case annual cash flows and NPV‘s more than doubled • Open pit, bulk mineable and very scalable • Commercial electricity and natural gas nearby1) Average for the first 5 years of production 26

41.
Community Relations A key to successful project development • Recent key additions to community relations team: • Jim Mallory, VP Operations and Social Responsibility – 35 years industry experience previously with Silver Standard, NovaGold, & Barrick (Placer Dome) • Miguel Reynaga, Director of Community Relations - 16 years experience with Newmont at their Inti-Raymi (Kori Kollo) Mine in Bolivia • Objectives to facilitate economic development in communities as part of project exploration, development and construction activities • Project construction will see workforce of over 1,000 with mine workforce of over 400 or more*Business for Social Responsibility, San Francisco, CA 41

42.
Project MilestonesValue drivers over the next 6-12 months • Malku Khota, silver-indium-gallium project, Bolivia Updated resource estimate & PEA more than doubles annual production to 13.2 M oz of silver, 80.7 tonnes of indium and 15 tonnes of gallium per year* Updated resource results show 60% increase in M&I ounces to 230 M oz of silver with an additional 140M oz inferred, and indium to 1,481 tonnes M&I and 935 tonnes inferred Cash flows, project valuations and rates of return significantly expanded over previous studies Pre-Feasibility work has started for the second half of 2011 • Major camp expansion to support up to 6-8 drills • Feasibility work to begin in 2012 • Escalones, copper-silver-gold porphyry project, Chile Exploration and Geophysics program underway • Drill program to begin late in 2011 • Target for initial resource estimate by end of 2011 • Potential for significant deposit of copper, gold and silver*Average first five years of production 42

43.
Leveraged to Silver Value of silver per dollar invested Additional value of Indium and Gallium Silver value per $1 invested SAC has some of the best leverage to silver of any development 45 stage company with nearly $45 of silver value per $1 invested 40 35 30 25 Average value of silver <$16 of silver per $1 invested* 20 15 10 5 0Source: Canaccord as of January 17, 2011, Share prices updated May 24, 2011Note: all companies have projects in South and/or North AmericaCalculated using $25/oz Ag. Dollar value of silver per $1 invested = (silverresource/shares outstanding) x $25/oz silver) divided by share price 43Value only shown for silver with no contribution from other metals

47.
Zamin Group - Strategic Investment A key regional player• Well funded regional player in South American resources industry with major projects in Brazil, Uruguay, Bolivia, and Chile• Strategic 19% investment positions SAC in strong financial and operational position to advance projects to feasibility• Track record of successfully facilitating South American project development through relationships with national and state governments in the region• Portfolio of South American projects with strong government support in permitting, rail and port infrastructure • Bamin Project-Brazil • Valintine Project-Uruguay • Acquiring assets in Bolivia over past yearTSX:SAC 47US OTC:SOHAF

48.
Management & Directors Ralph Fitch (Executive Chairman) is an explorationist with over 40 years of global experience, a co-founder of South American Silver andGreg Johnson (President/CEO & Director) has over 25 years mining former Chief Geologist for Chevron Minerals credited with several industry experience in corporate finance, project development and major discoveries in South America. exploration. A s a co-founder of NovaGold, he played a key role in Antonio Canton (Director) is consultant and director to a number of growing that company from $50 million in value to over $2 billion market international companies in marketing, finance and real estate. capitalization advancing 3 major projects through to Feasibility. Tony Cau (Director) is COO at Zamin Ferrous. With over 30 years ofWilliam Filtness (Chief Financial Officer) is a Chartered Accountant with experience in the mining, construction and heavy manufacturing over 20 years of financial experience in the mining industry. industries, he has been involved in mine development and expansionPhillip Brodie-Hall (Vice President of Project Development) has over 35 projects around the world for groups like BHP, SNC-Lavalin, and years experience in engineering construction and project development. He Bateman Engineering. has participated in nearly every aspect of evaluation, feasibility studies and Jeffrey Couch (Director) is the Head of Business Development at project development in the mining industry. ENRC and has held various financial advisory positions including forJames Mallory (Vice President of Operations & Social Responsibility) private equity groups such as Campbell Lutyens, was Director of has over 30 years of mining industry experience in large-scale mine Metals & Mining Investment Banking for Credit Suisse, and a key management, operations and construction for companies including Barrick member of the capital markets team for Citigroup European (Placer Dome), Silver Standard, and NovaGold. Investment Bank.Felipe Malbran (Vice President of Exploration) has over 25 years Paul Haber (Director) is a Chartered Accountant and a Certified Public experience in exploration management in South America including key Accountant, and previously CFO of a TSX-V company and Chairman roles in the discovery of Malku Khota, Vizcachitas, and Escalones. of the Audit Committee for South American Silver.David Dreisinger (Vice President of Metallurgy) is Professor and Industrial Peter Harris (Director) is a mining engineer with over 40 years of Research Chair in Hydrometallurgy at the University of British Columbia. industry experience including construction and operation of over 20 He is actively involved in developing and commercializing mines around the world with groups such as Barrick (Placer Dome) hydrometallurgical process at a number of mines worldwide. and NovaGold.Andrew Clark (Manager of Project Implementation) has over 30 years William Murray (Director) is an engineer in the mining industry with global industry experience in the development, design, management and over 35 years of experience in construction management and project construction of industrial mining projects. evaluation with groups including Fluor Daniel, DenisonRichard Doran, (Vice President & Corporate Secretary) has extensive Mines, Optimum Project Services and Anglo American Corp. industry experience including with General Minerals and as Marketing John Watson (Director) is President of a TSX -V listed company and Manager for Chevron Minerals. Manager of a limited liability corporation in commercial real-estate.Xavier Gonzales Yutronic (General Manager Compañía Minera Malku Tina Woodside (Director) is the head of Gowlings’ corporate finance Khota S.A.) has experience in management, finance, and community department and practices corporate and securities law focused on relations in the mining industry including with Glencore, and Comsur S.A. corporate finance, M&A and corporate governance matters. TSX:SAC 48 US OTC:SOHAF